Kobe Steel, Ltd. and China's Angang Steel Company Limited, a leading subsidiary of Anshan Iron & Steel Group Complex signed a joint venture agreement today, October 17, in Anshan, Liaoning province, to establish a joint venture in China to produce and sell advanced cold-rolled high-strength steel sheet for automobiles. The two companies had been conducting a joint study to explore the possibility of establishing a joint venture in China.

The new company, to be called Kobelco Angang Auto Steel Co., Ltd., will construct a continuous annealing line with a production capacity of 600,000 metric tons per year within Angang's steelworks. Following incorporation procedures to establish the joint venture, plans call for production to begin in early 2016. Total investments are anticipated to reach RMB .75 billion (¥28.9 billion).

Kobelco Angang will be headquartered at Angang's steelworks, Anshan Base, in Anshan, Liaoning Province. The continuous annealing line will make cold-rolled high-strength steel with a tensile strength of 590 MPa or higher. Angang will supply the joint venture with the substrate coils. The joint venture will employ about 100 people when it reaches full operation.

The new company will be capitalized at RMB 700 million (¥11.6 billion). Angang will own 51 percent of the venture. Kobe Steel plans to hold a 49 percent share through Kobelco (China) Holding Co., Ltd.

China is the world's largest automobile market. Car production is anticipated to increase by roughly 50 percent over the next 10 years. Governmental guidance is strengthening safety standards and environmental considerations. High-strength steel offers higher stiffness while maintaining safety. Contributing to lighter auto bodies, high-strength steel improves fuel economy. As a result, demand for high strength steel is anticipated to increase considerably in the future.